Late cash from developers boosted Tanaka, Fine campaigns

Filings show surge of money from builders before and after Election Day

While not necessarily "pro-developer," City Councilmen Greg Tanaka and Adrian Fine received large contributions from builders before and after the Nov. 8 election. Photos by Veronica Weber.

In the final weeks of their respective campaigns, City Council candidates Greg Tanaka and Adrian Fine were fighting off allegations from their opponents that they were beholden to developers and that they want to see the city grow significantly in the years ahead.

But even if Tanaka and Fine aren't exactly "pro-developer," new campaign-disclosure documents suggest that many local builders and property managers are very much pro-Tanaka and pro-Fine. In the weeks before and after Nov. 8, each candidate received several large contributions from builders, real estate professionals and developers, including in Tanaka's case one whose controversial project is about to be reviewed by the council.

Much like incumbent Liz Kniss, Tanaka received a windfall from developers after Oct. 22, the date by which contributions needed to be reported before the election. As such, these payments were not required to be disclosed until late January.

For Tanaka, a former city planning commissioner who finished second after Kniss in an 11-candidate field, the late contributions totaled $47,895, more than half of the $84,670 total that he received during his campaign and far more than any other candidate reported in the final filing period, which stretched from Oct. 23 on Dec. 31. The lion's share of Tanaka's new contributions came from builders and property managers, some of whom gave $5,000 checks.

Tanaka received last-minute, pre-election contributions from developers John McNellis ($500) and Charles "Chop" Keenan ($999). Keenan's employees Mark Gates, Perry Palmer and Joyce Yamagiwa contributed $999, which is $1 shy of the amount that would trigger a separate reporting requirement (known as form 497, which must be filed within 24 hours) in the days before the election.

Chasen Rapp, son of developer Roxy Rapp and partner in Rapp Development, also gave $999 to Tanaka.

Like Kniss, Tanaka also received a $2,500 contribution from the California Real Estate Political Action Committee (CREPAC). Unlike Kniss' campaign, which acknowledged its Oct. 18 CREPAC contribution well after the election, Tanaka's campaign noted its receipt of the Oct. 20 donation on a 497 form on Nov. 4.

Meanwhile, those who contributed after the election (when one no longer has to file separate disclosure for contributions of $1,000 or more) offered much higher sums to Tanaka's campaign. KG-Brannan, LLC, an entity registered as a "real estate investment" company, gave Tanaka $5,000 on Nov. 20, as did Vittoria Management, a local property-management company. Another $5,000 came from John Challas, whose LinkedIn profile identifies him as an "independent real estate professional."

Tanaka also received $3,500 from R&M Properties and $1,000 from Benjamin Cintz, whose family owns four properties in Palo Alto and who has been critical of the council's recent efforts to require retail on the ground-floor of commercial parcels.

Tanaka's biggest and most controversial contributions, however, came from the Wong family, which has been trying for more than three years to win the council's approval for a four-story, mixed-use project at 429 University Ave. The project, which won approval in 2015 but then was sent back to the drawing board after a resident appealed it, has been running into various obstacles since, with the Architectural Review Board voting in October to reject the most recent design.

The City Council is scheduled to consider the project on Feb. 6.

As the Weekly previously reported, Andrew Wong contributed $4,500 to Tanaka on Nov. 12, which brought his overall contributions to date to $5,000. On Thursday night, Tanaka told the Weekly that he has instructed his campaign to return the money.

Both the Wong family and Tanaka had told the Weekly last month the contribution is in no way linked to the application. Elizabeth Wong said they gave to Tanaka because "we need impartial and forward-thinking members on the council so we can have a better future for Palo Alto."

"I think the city is going down a very negative slope, and this is a way to try to bring the city back to what it should be," Wong told the Weekly, when asked about the money.

Tanaka also told the Weekly last month the donation will not influence him on the project. His campaign fundraising, he said, was handled exclusively by campaign volunteers, with no participation from himself. He decided to keep himself out of the fundraising precisely because "you don't want this kind of conflict of interest."

"I want to make sure I'm fair and impartial," Tanaka said.

But Michael Harbour, the appellant who challenged the project, sees the contribution from the Wong family to Tanaka as highly problematic. Far from promoting an "impartial" council, as Wong maintained, the money creates a perception of a conflict of interest for Tanaka, Harbour told the Weekly.

"I'm very concerned about the size and the timing of the donations, immediately before Tanaka is reviewing the project," Harbor said.

Harbour said he's notified the City Attorney's Office and believes there is sufficient evidence to require Tanaka to recuse himself from the deliberation.

Tanaka said Thursday evening that he had spoken about this issue with City Attorney Molly Stump, who told him that he has no conflicts and that he is free to participate in the review (Stump did not respond to the Weekly's inquiries). Even so, he said he decided to return the funds to avoid any perceptions of a conflict.

"The only reason I'm returning it is because of the proximity," Tanaka said, referring to the relatively short amount of time between the contribution and the council's review.

Fine, meanwhile, received fewer and less sizable late contributions in his successful bid for a council seat. He received $999 checks from Keenan, Gates, KG-Brannan, Rapp, Palmer and Yamagiwa, as well as $1,000 from Benjamin Cintz, $900 from Jay Paul Company and smaller contributions from several employees of Jones Lang LaSalle, a commercial real estate company. Other developers and real estate professionals who contributed to him were Jim Baer ($499), David Kleiman ($250) and R&M Property ($650).

Only three of Fine's contributions were $1,000 or greater, with $1,000 from Cintz and Joseph Martignetti and $2,500 from CREPAC. Fine reported receiving the Oct. 20 CREPAC donation on Oct. 24, apparently within 24 hours, as per the Political Reform Act.

Overall, he received $25,724 between Oct. 23 and Dec. 31, according to his filing, about a third of the $77,267 total that he raised during his campaign.

When asked about the late contributions from developers, Fine said he didn't request any of the funds. However, neither was he surprised. The goal of his campaign's fundraising was to get enough money to pay off the $15,000 loan he made to his own campaign.

Fine also maintained that he did not promise anyone anything in return for the contributions.

"Everyone in this city, including applicants and appellants, wants a fair hearing," Fine said, when asked about the late contributions.

He also stressed that there is nothing inappropriate about these funds: "There is no there there," he said.

"I think it's a complicated system and it seems like everyone played by the rules," Fine added.

When asked why so many of his contributions total $999, Fine said he has no theories on the matter.

Lydia Kou, who also won a seat on the council, reported $1,248 in late contributions, mostly from residents who gave her small checks. The largest contributions were $500 from local resident Don Nielson and $200 from Councilman Eric Filseth.

Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 3, 2017 at 10:31 am

Notable that the ONLY candidates who received large donations after the election happen to be the exact same four that were endorsed by the Chamber of Commerce and the Democratic Party: Fine and Tanaka as in the article, also McDougall ($16,000) and Kniss ($19,000), according to another local paper, both also mostly from developers and real estate professionals.

Also notable that these candidates had all previously made loans to their own campaigns, some large, which were then partly or completely paid off after the election.

Here’s a paranoid theory. Some experienced insider (Party? Chamber?) said to these four candidates “here’s how you dodge the disclosure rules. Get yourself some commitments from certain special interests. Then loan yourself some money and spend it. After the election, collect on the commitments and pay yourself back. That way nobody finds out until after the election.”

Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 3, 2017 at 10:41 am

Big Money now controls the Council, so Big Money is going to get what Big Money wants. More building, more building, more building...

A big reason why these candidates were able to hoodwink the Palo Alto voters is that they used their political connections to get endorsed by the state Democratic Party. The meant that uninformed Democrats thought these candidates represent the people, when it is now crystal clear that the candidates actually represent interests adverse to the residents.

This makes the Democratic Party complicit in the destruction of the Palo Alto quality of life, which should be incredibly embarrassing to every Democrat.

OUT OF CONTROL! NO along range vision regarding our quality of life, TRAFFIC and massive development along the whole
EL CAMINO CORRIDOR ! With no regard for transportation impact !
WHY?

BEcause we voted for council member who line their bank account and ensure their salary regardless of their performance ...
With money contributions of developers , investors, realtors and property managers who crave their votes and approvals
So as to also frill their coffers.
DO THEY CARE ABOUT TRAFFIC IMPACT OF MASSINVE DEVELOPMENT HERE, or how it affects the quality of our lives??? HELL NO !
Follow the money...
I am so disappointed in the immoral behavior of:
Kniss
Tanaka
Fine

Yes, they can be bought. PALO ALTO CITIZENS WHO VOTED ! YOU GOT IT NOW! WAKE UP PEOPLE !

Then we have another election, and they can run if they dare. Otherwise, now that they have had fun basking in the glory of their victories, they can just wallow in the shame of how those victories were achieved and hide in the dark, dark shadow they have cast over Palo Alto. If it "all blows over" and nothing is done, then that shadow will soon be replaced by a bigger one cast by tall buildings.

Posted by You were all fooled easily
a resident of Barron Park
on Feb 3, 2017 at 12:03 pm

Despite all the early signs that big-money developers and pro-growth interests were behind these candidates, they were very skillful dodging difficult questions during the campaign and many voters bought into their 'progressive' views. They also managed to fool many of you into thinking that there was a problem w/ local residents' donating to the residentialist candidates.

For such an educated community, I find it sad and laughable that many of you were fooled so easily by the political establishment and their big-money supporters.

Please learn your lesson well, and realize that developers, big businesses, and political parties don't have your best interests in mind. I think Palo Alto for Sensible Zoning is the only group speaking on behalf of residents who want to preserve our quality of life.

Posted by NoGreasedPalms
a resident of Crescent Park
on Feb 3, 2017 at 1:03 pm

There are so many appalling things in this article. These council members should be removed from office! It is clear they are deceitful and unscrupulous. We need to make all our tax paying neighbors aware of what has happened. This headline barely alludes to the foul behavior of these council members. I feel duped into voting for Tanaka and Fine. Is this not bribery of public officials?

Also- the plan for 429 University (Shady Lane building) can not be approved. The Wongs are the owners that tore down the beautifully historic Z Gallery building in 2008. They do not want to stop at the Shady Lane demolition, they will then move to destroy the original Apple Store- which they also own and have been wanting to tear down for years.

Bribery and corruption have no place in Palo Alto and we can not tolerate it.

Question for Adrian Fine: In October on twitter, you wrote: The #VoteFine2016 campaign is keeping it clean and focused on issues. But I will always call out bad and unproductive behavior" with a link to this article Web Link, in which you accuse your opponents of "going low" when they said that you were pro-developer. Given Monday's council meeting and your recent donations, can you explain yourself?

Posted by Cheryl Lilienstein
a resident of Barron Park
on Feb 3, 2017 at 2:26 pm

Copy of letter sent to CC and elected officials who DID NOT KNOW the people they "endorsed."

Dear City Council (with copies to respected electeds),

We have a problem here in Palo Alto. What follows is an example of an immediate problem that Democratic Party endorsement processes created. Simply: you are respected officials who allowed your names to be used by candidates who were never vetted by you. A Republican who changed party affiliation just for this election was endorsed by you.

I doubt you would have done that had you known.

So now we have this corruption problem, which you had an unwitting hand in creating. And I hope you will contact the Palo Alto City Council — and its attorney— with your opinion on this matter.

Here’s the issue:

The developer of 429 University wants to build a massive overwhelming building and has not made the changes the appellant Michael Harbour requested, and ARB and the Council mandated. The building is overwhemingly massive, and will negatively impact the area around it. The city council should reject the developer’s plan because the required changes have not been made.

Instead of complying, the developer donated money to help elect a more favorable council. As the Democratic Party favors clean money policies, you can understand that cleaning up the party endorsement processes is important, and I hope you will step up to the plate once you read what follows.

Greg Tanaka (who you "endorsed") is “returning" bribe money from the Wong family, just days before the vote on their project at 429 University (which can of course can be returned to him after the city council vote) and he claims it’s not a problem for him to sit on the voting body. Ethics laws demand Councilmembers who accepted these contributions or have an appearance of a conflict of interest need to recuse themselves ENTIRELY from the discussion. If Tanaka is really a Democrat now, he should do the same.

Further, there was an illegal gigantic TANAKA campaign banner mounted at the busiest city corner of University and Alma — on a building OWNED by the architect of 429 University — further making councilmember TANAKA appear to be engaging in corrupt behavior. It beggars the imagination to hear him say he "did not know about it.” Or that he does not see a problem with it. But perhaps given the behavior we now see in the Republican party, it’s not a surprise.

If respected public servants who are Dems allow opportunist and ethically challenged Republicans to use their good standing for corrupt purposes, doesn’t this call into question the Democratic Party itself? We need you to bolster public morale by doing the right thing.

None of you should tolerate Greg Tanaka sitting on the council for this vote. Please make the call.

Posted by Richard Placone
a resident of Barron Park
on Feb 3, 2017 at 3:33 pm

Before the election I knew that these three candidates were strong developer proponents. All one had to do was look at their past record. Hence I did not vote for any of them. I agree with the sentiment of most commenters here - they all three should resign. If that is asking too much, for the sake of decency, then the least they should do is return the money to those who gave it to them. Further they should then be required to recuse themselves from any development project that comes before the council in the next six months. However, should any of these measures not be taken, I want the city to set a recall election for the three of them. What a disgrace.

Posted by @PAFreePress
a resident of Barron Park
on Feb 3, 2017 at 10:06 pm

The Weekly has done nothing to advance the quality of life in Palo Alto. If fact they have been in bed with perhaps every council member as far as we can remember to permote their own revenue stream . [Portion removed.]

Posted by It's really the comp plan
a resident of Another Palo Alto neighborhood
on Feb 4, 2017 at 1:28 am

The real concern here is the comprehensive plan. It's an important dicument with legal implications. If the plan is gutted, there will be no stopping the Council from overbuilding,

Gutting the comprehensive plan as they did goes against the state rules and in conjunction with the undisclosed developer gifts, should be grounds for recall. They will not resign. Anyone who has that kind of gall doesn't care enough about the ethical stain to have the decency to resign.

No, residents should demand a recall. There is a process spelled out in City code. Don't wait for someone else to do it. @Curmudgeon, The game is not over unless someone steps up and starts the ball rolling. Many will help, but someone needs to start it.

Posted by It's really the comp plan
a resident of Another Palo Alto neighborhood
on Feb 4, 2017 at 8:30 am

@question,
"Should" in politics is all about levers. No, she shouldn't. But who is going to make "should" into "did"? Checks and balances exist, but citizens have to take the initiative to know what they are (note the wording there) and take action if they feel it's needed. If you think something must be done, start the ball rolling.

Is it possible to get something passed that requires council members to recuse themselves when voting on matters that concern any parties that donated more than X amount of money (maybe anything over $500?) to their campaign?

What can we do as citizens to ensure the development money does not corrupt our City Council decisions?

Posted by Both sides
a resident of Adobe-Meadow
on Feb 6, 2017 at 9:57 am

Weren't the big donations from moneyed interests with ties to Castilleja development back in October (see link below) also objectionable? I don't see how you can rail against the unfair influence of big money on the Council without being equally outraged by these very large donations that the alleged "slow growth" proponents eagerly accepted. Furthermore, Kou and Keller used this money to run negative attack ads, thus setting a new precedent for incivility in our local politics.

As I said in the earlier post, I do think that the developer donations do look bad, and I'm sure that the developers did not donate that money without expecting something in return. But let's not be hypocritical and not admit that both sides accepted large donations from powerful interests.

Both sides: You miss the point and the main complaint about the developer "donations". While you are quite right to decry the amount of "big money" to many candidates on all sides in the recent Council race, the difference is that the Kou/Keller contributions were - as the law requires - disclosed well before the vote. And the donations were covered in detail in the local press. They were discussed here. Voters could make up their minds about how this information should figure into their choice of whom to support.

By contrast, Kniss hid the donations and used a "dog ate my homework" excuse to explain why they weren't disclosed until after the voters had voted. Her and Tanaka's campaign promises of moderation on development issues were revealed as empty lies they are by their votes to gut the Comprehensive Plan. Had we known that Kniss and Tanaka were taking big bucks from developers while promising an open mind, would the election have turned out differently? We'll never really know, but the distaste for their actions shown on this thread indicates that a lot of people would have been revulsed by them then - before the vote - as they are now when it's too late.

Posted by Both Sides
a resident of Adobe-Meadow
on Feb 6, 2017 at 12:47 pm

@Mary, framed that way, I do see your point. I wonder why campaigns can receive cash donations after an election is over in the first place? In any case, it will be interesting to see how the Council members who have received these donations vote on upcoming projects, especially in the instances where they received donations from exactly the developers whose projects are up for review.

Posted by Disgusted Resident
a resident of Community Center
on Feb 6, 2017 at 6:41 pm

OK, a lot of agree that a recall is necessary. Maybe we can turn some of the discussion toward figuring out how to get that rolling. We should all check out the city charter, as someone mentioned earlier.

Posted by Richard Placone
a resident of Barron Park
on Feb 6, 2017 at 11:23 pm

Recall elections are very complicated, take a fair amount of time to set up, the expenses of setting it up are borne by those attempting the recall, and the cost of the election is very expensive. This latter cost is borne by the city, i.e. us taxpayers.

While this is an attractive action, I think it would be just as productive and get our point across if a large number of residents were to petition the City Council members demanding that for all future development projects, say for the rest of 2017, that any Council member who received funds at $5000 per contribution or more from a prospective developer, be required to reveal at the Council meeting at the time the project comes to the attention of the Council for approval. Then that Council member will be required to recuse him/herself from consideration of the project.

I have already sent a letter to the council asking just that. But that is one letter. To be effective the council will have to receive over one hundred letters or more. That is not too much of an effort. This can be done by individuals, or better yet, by already organized neighborhood groups.

Posted by It's really the comp plan
a resident of Another Palo Alto neighborhood
on Feb 7, 2017 at 12:02 am

@Richard,
With all due respect, the Councilmembers have already shown a disdain for residents and the rules.

I don't think a recall is any more expensive than a referendum. Councilmembers can always resign in the face of their hiding all that developer cash, and then it won't cost anything.

We are in the middle of a comp plan revision. If these Councilmembers continue this way, it's going to mean fighting them project by project. No, it's better to recall them for the betrayals of the campaign money issues and gutting all the citizen commission work without public input. Which is against the rules.